Recent decision highlights consequences of unjust dismissals of casual employees
Employers are still liable for unjustified dismissal, even when the employee in question is hired on a casual contract – as highlighted by a recent determination.
It is generally known that under a casual employment arrangement, an employee has no expectation of ongoing employment. However, an agreed series of shifts can constitute a period of engagement akin to a fixed term, meaning caution is required if an employer wants to end the engagement early.
The recent Employment Relations Authority determination, Ford v. Haven Falls Funeral Home Ltd (Haven Falls) [2024] NZERA 224, highlights the costly consequences of failing to get this right.
Haven Falls confirms that during a casual employee’s period of engagement, the employment relationship is afoot and so too are employment obligations and duties, including those around dismissal.
Dismissal during training
Haven Falls employed Mr Ford under a “casual” agreement in January 2020 and offered him shifts across eight weeks for staff training. Unfortunately, Haven Falls perceived some behaviour and performance concerns. In early February 2020, Haven Falls sought to end Ford’s employment part way through this training and provided him with a letter confirming ongoing training would not proceed.
At the Authority, Ford claimed he was a permanent employee and his dismissal was unjustified under the Employment Relations Act 2000 (Act). In contrast, Haven Falls claimed Ford was a casual employee and it had no obligation to continue his training and employment.
Ford lost out on his claim that he was a permanent employee but succeeded on his claim of unjustified dismissal. He had been initially offered – and accepted – shifts across an eight-week period. Haven Falls dismissed him after three weeks – that is, during a period of engagement.
With reference to an earlier Employment Court decision Rush Security Services Ltd t/a Darien Rush Security v. Samoa [2011] NZEmpC 76 - the Authority confirmed that because the employment relationship was ongoing at that point, Haven Falls should have – but did not – act as a fair and reasonable employer could have in respect of the process and fairness of dismissal. To remedy this, Haven Falls was ordered to pay Ford lost wages for the remaining weeks of training he had been rostered (with interest) and $20,000 gross for hurt and humiliation.
What should employers do?
If an employer wishes to end employment part way through an engagement, this must be done both in a procedurally fair way and with a substantively justifiable reason. Outside of the engagement, an employer has the option of not offering further shifts. We recommend making this clear in the casual agreement.
Joseph Harrop is a senior associate specialising in employment law and health and safety law at Lane Neave in Auckland. Helena Scholes is at Lane Neave is a solicitor in the Employment Law team at Lane Neave in Wellington.
